Efficient responses to climate change require accurate estimates of both aggregate damages and where and to whom they occur. While specific case studies and simulations have suggested that climate change disproportionately affects the poor, large-scale direct evidence of the magnitude and origins of this disparity is lacking. Similarly, evidence on aggregate damages, which is a […]

Using a dataset of 15 million UK job adverts from a recruitment website, we construct new economic statistics measuring labour market demand. These data are ‘naturally occurring’, having originally been posted online by firms. They offer information on two dimensions of vacancies—region and occupation—that firm-based surveys do not usually, and cannot easily, collect. These data […]

Barber and Odean study the relationship between trading activity and returns. They find that households who trade more have a lower net return than other households. They argue that these results cannot emerge from a model with rational traders and instead attribute these findings to overconfidence. In contrast, we find that household financial choices generated […]

Chinese local governments wield their enormous political power and administrative capacity to provide “special deals” for favored private firms. We argue that China’s extraordinary economic growth comes from these special deals. Local political leaders do so because they derive personal benefits, either political or monetary, from providing special deals. Competition between local governments limits the […]

We introduce a computationally tractable dynamic equilibrium model of the automobile market where new and used cars of multiple types (e.g. makes/models) are traded by heterogeneous consumers. Prices and quantities are determined endogenously to equate supply and demand for all car types and vintages, along with the ages at which cars are scrapped. The model […]

Is Construction Investment Holding Back Job Creation?

Employment level statistics for the month of June 2015 looked a bit worrisome for some economists. At a glance, Construction was one of the missing sector in the list of industries significantly contributing to job creation. Indeed, Construction was the last sector in joining job creation after the Great Recession. Though ADP, the payroll company, reported that the sector added an estimated figure of 19,000 jobs during the month of June 2015 -which reflects a slight decline from the month of April-, establishment survey data from the U.S. Bureau of Labor Statistics (BLS) showed no addition for the Construction payroll data. More in detail, BLS employment data on Construction sector showed that it contracted at several specific specialties. The table below shows awful figures for a season which is said to be appropriate for outdoor works.
Specifically, activities that cut back in employment were nonresidential specialty trade contractors (-5.6K estimated employees), specialty trade contractor (-1.9K estimated employees), Residential Building (-6.1K estimated employees). Although there is much of a mix in the employment data for the sector, the aggregate figures suggest that a brief revision is worth doing in order to see whether there is an industry slow down, or just a deferred process due to weather conditions.

Well, the latest data on Construction put in place –May 2015- in the United States show no change in construction investment on month-to-month basis. Estimated change in construction spending for May 2015 was about 0.8% ($1,035.8 billion), with a margin error of +/- 1.5%. Furthermore, most of the estimated values do not support alternative hypothesis in order to reject the null hypothesis. In other words, there is no statistical evidence to claim that construction spending was different than zero (0) in the United States from April to May 2015. At the least, we could say that weather has not played a deferring factor for Construction activities, thereby affecting employment levels for June 2015.

Although data released by the U.S. Census Bureau is subject to constant revision, it seems unlikely that those figures change given the data on employment level. That is, employment levels data are sort of “confirming” that current investment in Construction is not enough for the sector to keep up with economic growth, at least for the summer season.